BANK OF CHINA ESTIMATES CHINA JUNE CPI RISE AT 7.1-7.4%

BEIJING, Jun 30, 2008 (AsiaPulse via COMTEX) -- BACHF | Quote | Chart | News | PowerRating -- A research report released by the Bank of China (BOC) (SSX:601988, SEHK:3988) Monday estimates China's consumer price index (CPI), a main indicator for measuring inflation, to rise about 7.1-7.4 per cent on year in June, and less than 7 per cent in the third quarter.

But the report notes that the annual inflation rate may still surpass earlier expectation (at under 4.8 per cent officially), though it will go in the trend from high to low.

China's consumer price index (CPI) grew 7.7 per cent in May this year, according to statistics published by the National Bureau of Statistics (NBS). Compared with the 8.7 per cent, 8.3 per cent and 8.5 per cent growth in the previous three months, the CPI growth in May has dropped year on year obviously. Experts attributed this mainly to two factors: fall of food prices and tail raising.

The BOC report predicts food price in June CPI to fall 0.4 per cent month on month and rise 17.8 per cent year on year, while non-food price to climb 1.9 per cent year on year. The June CPI is thus estimated to rise 7.1-7.4 per cent, mostly possible 7.3 per cent, on year.

The report also forecasts the 2008 annual CPI to stand at 2 percentage points higher than the market expectation at the end of 2007.

The report suggests the central bank consider proper price-oriented regulatory means, as quantity-oriented regulation will be increasingly difficult.

(XIC)

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